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CONSERVATIVES at their party conference in Birmingham are working hard to avoid triumphalism - a prudent strategy, given the dire economic news breaking daily. Thus sobriety was what characterised Shadow Chancellor George Osborne's keynote speech today: his aim was to convince not only that he has the personal weight but a tough enough approach for a new economic era.
The Conservatives would bring spending under control, he said, in contrast to the largesse of Gordon Brown and the "casino capitalism" that he had encouraged. The "age of irresponsibility" is over: a Tory government would submit its spending plans to scrutiny by an Office for Budget Responsibility. Indeed, Mr Osborne made a merit of austerity: he baldly pointed out to delegates that "the cupboard is bare. There is no more money." He did, however, promise that if councils provided savings, a Conservative government would match them to freeze council tax for two years.
But however well-founded Mr Osborne's analysis may be, he still has an uphill struggle to convince families that their plight can be blamed on the Government. Ministers have effectively shuffled off responsibility for the downturn on the global economy, on factors outside their control. Certainly, many of the reasons for the rise in food and fuel costs are not attributable to the Government. But Mr Brown's inability to help out individuals now is directly attributable to his free spending when the going was good. The Tories' task is to bring that home to the electorate - at the same time as convincing them they have a fresh vision to cope with tough times.
The party's over
PERHAPS the only thing that could have put the Government's nationalisation of Bradford & Bingley in the shade was the approval by Democrats and Republicans in the US of the $700 billion bailout for the American banking system. The Bradford & Bingley deal - described by the Chancellor as "quick, decisive action" - involves the Government selling off the former building society's savings accounts and branches to the Spanish investment bank Santander, whi le taking on more than £40 billion of mortgage debts. But to sweeten the pill, the risk to the taxpayer is limited: the banking industry will have to underwrite a significant proportion and pay annual interest on the Treasury loans.
Similarly, the American agreement will essentially pass the responsibility for banks' bad, propertybased debts - though some at least of this will be recouped as the property market recovers. On both sides of the Atlantic, this amounts to state intervention in the financial system on a colossal scale. In the US, the outcome is uncertain: the draft law enabling the bail-out has yet to be ratified in Congress. Even if passed by reluctant Republicans, it is by no means guaranteed to achieve its aim, to bring stability to the US financial sector.
The hope is now that the intervention of the US and British governments will restore confidence to a battered financial system but the initial reaction from the markets has been muted. It will be days and weeks before we know whether it has worked. But it is hard to see how, in the end, the collapse of Bradford & Bingley, the very eventuality that the Northern Rock nationalisation was supposed to forestall, can improve the reputation of Mr Brown's Government.
High-speed vision
HIGH-SPEED rail links across Britain, as proposed by the Tories, are a bold alternative to expanding Heathrow. They want to spend £20 billion over 12 years to pay for a high-speed link between London, Birmingham, Manchester and Leeds and between St Pancras and Heathrow. The big question is where the Tories would find £20 billion, given present financial constraints. But if they can construct a plausible funding package, this would mark a genuinely radical move towards an environmentally responsible transport policy.
Reader views (2)
Yes tories if this rail link is a MANIFESTO COMMITMENT I will give you more money and renew my party subscription and vote for you and have your babies. Lets have more good ideas like this. I am sure that you can easily find 20 BN from some of the profligate policies of the current regime.
- Julian Rolfe, Paris, France, 22/12/2008 12:39
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The problem with the Tories is that for all their public school educations they are too stupid to see the whole party is over not just the bit they have condemned, .... capitalism is dead in the water when its greatest proponents, the Americans, casually nationalise everything in sight. The "Private Eye" magazine hit the nail on the head when the writing was on the wall ages ago with their joke of two bankers talking "Don't they understand capitalism is about private profit and public loss?" Couldn't have put it better myself. If you or I steal money and we are found out the money is taken back, this money has not disappeared it is sitting in the Swiss bank accounts of all of those former "Masters of the Universe" and the world should demand that the Swiss hand over the stolen cash or hand over the Swiss economy. Time has run out for the gnomes of Zurich as well as the rest. They should have listened to the man himself when he said in the Wealth of Nations that when the merchant classes get together for whatever reason the conversation invariably turns to how they may act in concert to the detriment of the customer (cartels). Adam Smith said strong controls were required to avoid this but where would the wealth of all the Camerons and Osborne's be then? In your back pocket where it belongs. The Tories are hypocrites, always have been and always will be.
- John, Dundee, UK, 29/09/2008 17:27
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